The NZDUSD opens at 0.8545 this morning.
The NZDUSD traded to a 6½ week low of 0.8531 yesterday before staging a small bounce.
Fonterra is expected to announce a lower forecast payout for the 2014/15 season this afternoon in response to falling global dairy prices.
The quantum of payout reduction will impact the NZD – the previous forecast was $7.00 per kg, and fall below $6.00 will be sharply negative for the NZD, whereas the NZD may rally if the payout is only reduced to circa $6.50.
The USD drifted slightly lower but remained close to 6-month highs against a basket of currencies overnight.
Geopolitical tensions remain heightened after talk of new sanctions against Russia in response to the Ukrainian crisis.
Globally, the markets are focused on US GDP data and the US Federal Reserve interest rate meetingon Thursday, followed by the closely watched US non-farm payroll employment figures.
Global equity markets were mostly lower up on the day – Dow +0.1%, Nikkei +0.5%, Shanghai +2.8%, FTSE-0.1%, DAX -0.5%
Gold prices fell 0.3% to USD$1,304. Oil prices gained -0.8%.
The current indicative mid-rates are:
NZDUSD 0.8545
NZDEUR 0.6360
NZDGBP 0.5035
NZDJPY 87.05
NZDAUD 0.9090
NZDCAD 0.9230
There is no data scheduled on the domestic data calendar today.
Consumer confidence and some housing data will be released from the US tonight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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